10/02/2014
I met Jonathan Buford at Holly Brown in K-11. As soon as he started speaking, I instantly felt how passionate he is about the life in Hong Kong and the company Makible he is running.
Hi Jon, tell me, how did you end up in Hong-Kong?
The first time I came here, I decided this is where I want to relocate. It was a practical choice. Back in 2000 in the US, the crisis was just getting started; I knew it was not going to end well. Mortgages were just insane. Other factors such as social factors (i.e 9/11 attack) motivated me to choose to move to HK. I wanted to move somewhere where there were more potential and HK was just perfect at that time. What I saw here was a growing market; nobody could say who will be on top, even now.
What motivated you to create Makible?
One of my other assumptions is that many of the jobs (manufacturing) that moved outside HK will move back to HK. For a lot of jobs there is not any difference between what you pay here and what you pay in China now with inflation and wage increases in China the last 5 to 10 years. Besides, HK is an open free port; it is really convenient to move stuff through here.
I believe we will have more factories in HK in the next couple of years. Rent is not that expensive, it is about 5 to 10 HK dollars/sqare foot. Of course, it works for businesses that have high margin products, not low cost commodity items. As we expand our network for production globally, what you are substituting for the cost of transportation and local wages is time to market. Time is really important and trends can quickly evolve. Your lead time is one of the most important factors. For example retail such as Wallmart has to purchase 6 to 9 months earlier. If you use traditional factories, a basic electronic product will take 3 to 6 months to be manufactured and delivered. It is the reason Wallmart must order 6 to 9 months before.
The current problem is that methods of doing production have not changed. Of course they have improved, they are faster, technology is better, but the whole process has not changed significantly. They are not leveraging expert systems for making things efficiently; they are not able to break things down to improve the process. If you look at injection tooling machine, it is a very serial method using large pieces of equipment and large tools. It is why it takes 30 to 45 days for a basic new product. The problem is that factories are using long pipelines and at a certain points they just can’t go faster. Imagine you want to change a feature within a long pipeline you will have many losses. With many short pipelines you will reduce your losses. Manufacturing process is currently a very long pipeline process, like computer processors back in the early 2000s.
If you make the tool smaller, all of a sudden, you will be able to consistently output x items/day based on the demand and if you need additional capacity, you can cheaply and quickly make a duplicate tool. You will be able to produce what you need. With traditional factories, the scale of the process means that you can only produce a large amount of items efficiently, for example 10, 000, it is not flexible.
The technology does not really exist right now to be flexible in terms of production. Nobody made a full production system like that for now. The problem is the scheduling system. There are many companies that are producing injection machines but they are not making a complete ecosystem to work efficiently. Nobody has really approached the whole problem.
To conclude, we are developing the new supply chain that will allow you to be flexible in terms of production.
What are the strengths of this system?
At different time it will have different strengths. If a company does not know how many items they need to produce but they need it now, it will be cheaper and faster for them. If we did it in a more traditional way, the cost of the machine will be significantly higher. With the traditional manufacturing processes, if you make small changes you ruin the tool or you delay your process. Nowadays, we need to be able to make changes instantly. It will allow you to do better product, faster and cheaper because you will be able to iterate faster and for less cost. There are certain design decisions and constraints with traditional equipment that lead to larger tools with higher pressure which leads to larger tools. With a new approach, we will be able to reduce the size of the tooling, which reduces the cost and also makes it easier to handle and setup the equipment.
What is your current business model?
We are trying to have something for everybody (in the manufacturing space). Our core business will be to develop and use the system for ourselves, providing a contract manufacturing service. Potentially our customers will also learn to use and purchase our equipment to use as well. We can also offer a software service with the scheduling system for others. With customers using our machines, they will own their process like this and it will be cheaper or more controllable for them this way. They will be more flexible, being able carry out key decisions more easily. Small changes will not be impossible to do. At the end you will be able to sell products cheaper and faster. We are developing an efficient framework to support this.
What is the future of this industry?
There are millions and billions (even trillions) of dollars invested in current equipment. That is not going to go anywhere. It is not going to change all of a sudden. At some points it makes sense to use this existing equipment. We are betting on parallel small processes instead of big serial processes. There is no cap on the upper end. Traditional machines are very rigid and it makes loads of constraints. At some points it will not make sense to run the bigger tools. It will take time, you cannot make these kinds of changes over a night. We are starting with markets that traditional processes can’t address efficiently such as crowd sourced projects.
I met Jonathan Buford at Holly Brown in K-11. As soon as he started speaking, I instantly felt how passionate he is about the life in Hong Kong and the company Makible he is running.
Hi Jon, tell me, how did you end up in Hong-Kong?
The first time I came here, I decided this is where I want to relocate. It was a practical choice. Back in 2000 in the US, the crisis was just getting started; I knew it was not going to end well. Mortgages were just insane. Other factors such as social factors (i.e 9/11 attack) motivated me to choose to move to HK. I wanted to move somewhere where there were more potential and HK was just perfect at that time. What I saw here was a growing market; nobody could say who will be on top, even now.
What motivated you to create Makible?
One of my other assumptions is that many of the jobs (manufacturing) that moved outside HK will move back to HK. For a lot of jobs there is not any difference between what you pay here and what you pay in China now with inflation and wage increases in China the last 5 to 10 years. Besides, HK is an open free port; it is really convenient to move stuff through here.
I believe we will have more factories in HK in the next couple of years. Rent is not that expensive, it is about 5 to 10 HK dollars/sqare foot. Of course, it works for businesses that have high margin products, not low cost commodity items. As we expand our network for production globally, what you are substituting for the cost of transportation and local wages is time to market. Time is really important and trends can quickly evolve. Your lead time is one of the most important factors. For example retail such as Wallmart has to purchase 6 to 9 months earlier. If you use traditional factories, a basic electronic product will take 3 to 6 months to be manufactured and delivered. It is the reason Wallmart must order 6 to 9 months before.
The current problem is that methods of doing production have not changed. Of course they have improved, they are faster, technology is better, but the whole process has not changed significantly. They are not leveraging expert systems for making things efficiently; they are not able to break things down to improve the process. If you look at injection tooling machine, it is a very serial method using large pieces of equipment and large tools. It is why it takes 30 to 45 days for a basic new product. The problem is that factories are using long pipelines and at a certain points they just can’t go faster. Imagine you want to change a feature within a long pipeline you will have many losses. With many short pipelines you will reduce your losses. Manufacturing process is currently a very long pipeline process, like computer processors back in the early 2000s.
If you make the tool smaller, all of a sudden, you will be able to consistently output x items/day based on the demand and if you need additional capacity, you can cheaply and quickly make a duplicate tool. You will be able to produce what you need. With traditional factories, the scale of the process means that you can only produce a large amount of items efficiently, for example 10, 000, it is not flexible.
The technology does not really exist right now to be flexible in terms of production. Nobody made a full production system like that for now. The problem is the scheduling system. There are many companies that are producing injection machines but they are not making a complete ecosystem to work efficiently. Nobody has really approached the whole problem.
To conclude, we are developing the new supply chain that will allow you to be flexible in terms of production.
What are the strengths of this system?
At different time it will have different strengths. If a company does not know how many items they need to produce but they need it now, it will be cheaper and faster for them. If we did it in a more traditional way, the cost of the machine will be significantly higher. With the traditional manufacturing processes, if you make small changes you ruin the tool or you delay your process. Nowadays, we need to be able to make changes instantly. It will allow you to do better product, faster and cheaper because you will be able to iterate faster and for less cost. There are certain design decisions and constraints with traditional equipment that lead to larger tools with higher pressure which leads to larger tools. With a new approach, we will be able to reduce the size of the tooling, which reduces the cost and also makes it easier to handle and setup the equipment.
What is your current business model?
We are trying to have something for everybody (in the manufacturing space). Our core business will be to develop and use the system for ourselves, providing a contract manufacturing service. Potentially our customers will also learn to use and purchase our equipment to use as well. We can also offer a software service with the scheduling system for others. With customers using our machines, they will own their process like this and it will be cheaper or more controllable for them this way. They will be more flexible, being able carry out key decisions more easily. Small changes will not be impossible to do. At the end you will be able to sell products cheaper and faster. We are developing an efficient framework to support this.
What is the future of this industry?
There are millions and billions (even trillions) of dollars invested in current equipment. That is not going to go anywhere. It is not going to change all of a sudden. At some points it makes sense to use this existing equipment. We are betting on parallel small processes instead of big serial processes. There is no cap on the upper end. Traditional machines are very rigid and it makes loads of constraints. At some points it will not make sense to run the bigger tools. It will take time, you cannot make these kinds of changes over a night. We are starting with markets that traditional processes can’t address efficiently such as crowd sourced projects.